Financial Independence Daily FI discussion thread - Thursday, January 20, 2022 |
- Daily FI discussion thread - Thursday, January 20, 2022
- Test FIREd for 7 months - one thing I learned about myself
- Over 55k+ Per Year in Spare Cash
- What do you all do with your spare cash that has helped FI/RE?
- Looking for advice to retire in 6-7 years
| Daily FI discussion thread - Thursday, January 20, 2022 Posted: 20 Jan 2022 02:02 AM PST Please use this thread to have discussions which you don't feel warrant a new post to the sub. While the Rules for posting questions on the basics of personal finance/investing topics are relaxed a little bit here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply! Have a look at the FAQ for this subreddit before posting to see if your question is frequently asked. Since this post does tend to get busy, consider sorting the comments by "new" (instead of "best" or "top") to see the newest posts. [link] [comments] |
| Test FIREd for 7 months - one thing I learned about myself Posted: 19 Jan 2022 09:44 AM PST Hi folks, I took some time off in early 2021 through mid 2021 after leaving a job with the worst manager I've had in my career after only 3 months. At the time, my allocation was around 99% equity and 1% cash. When I started my time off, I wasn't sure whether I wanted to work again. One thing I learned through the experience is that, I didn't feel "safe" selling my investments to cover expenses. It's a short sample size of only 6 months, and I probably would have ended up with higher NW due to stock appreciation, but selling a portion of investments did something to my psyche. Since then, I've started work again and have allocated private REIT portfolio totaling about 8% of our NW providing us with monthly passive income (tax efficient and reinvested at the moment) and planning to grow the allocation to around 20% - 25% which will cover most of our annual expenses. I do not have any bonds. For those who are FIREd, have you faced something similar? How do you reconcile mentally? EDIT: There are a lot questions and discussions going around regarding REITs, so here is some additional context. REITS we invested in aren't publicly traded REITs (for example VNQ) or even REITs such as Fundrise. As accredited investors, doors open to you to invest in tax advantaged REITS that are direct RE ownership structure. Not everything is designed to rip you off, I would suggest you do your own research. I am a Boglehead and that's how I got here, and there also was discussions around this type of investment at the official website as well. [link] [comments] |
| Over 55k+ Per Year in Spare Cash Posted: 20 Jan 2022 11:20 AM PST Hi All, I'm new to this forum so I apologize if I'm missing any key details (please feel free to ask). Here's the situation. I work a commission heavy job where I'm on a 75k draw + commission (if you're not familiar with a draw essentially it's an advance on my commissions). I was averaging around 100k per year when all was said and done (worse year 78k best year 123k). Obviously due to the uncertainty of pay, my entire budget would be based off 75k and everything more was just extra used to aggressively pay off debts. I recently just landed a new job paying 130k base with bonuses and benefits guaranteeing me roughly $150,500 per year. I'm a little confused on what my investment strategy should be moving forward with much of the new available revenue. As of now these are my current financial stats: Age: 29 Rent: $1450 mo Car: $12,842 left ($328 month) Outside of this (and typical bills) I have already paid off all credit card debt, student loans, other major debts, etc. My thoughts that I want critique on are the following: My original plan is to keep my same lifestyle off of 75k. First step is to save up 3 months worth of income for a rainy day ($18,750 based off the 75k) in my "high yield savings account." I'm already 75-80% of the way there. Next I want a combination of investments with the additional cash mixed between an index fund and crypto (so my money is doing more than just sitting in savings). Going this route I'm confused on what my ratios should be though (how much in mutual, how much devoted to crypto, etc.) Would love some of you guys input! [link] [comments] |
| What do you all do with your spare cash that has helped FI/RE? Posted: 20 Jan 2022 10:59 AM PST Wanted to share a strategy that has really helped my FI/RE progress, and hear your side hustle(s) and/or other strategies that have helped you capitalize on loose change. Had a little extra money at the end of 2019, $2100 to be exact, and started looking into coattail investing where you mimic institutional investors. Must have been luck of the draw, but I found a fund, Abdiel Capital Advisors, LP, through a little research (WhaleWisdom, Abiel's job applications, their LinkedIn, SEC filings) that was info-tech overweight, emphasized that they were long-only, invests in a total of 10-15 positions, and holds most of these positions for around 3-5 years. A 13F is a quarterly filing that is required to be filed by all institutional investment managers with at least $100 million in AUM, and the report details a snapshot of the investment managers holdings at quarter-end—but is only made publicly available 45 days after the end of the reporting quarter, so there's a huge delay in knowing what the fund is up to for the preceding 45-135 days. Most funds also use many different types of securities that aren't required to be reported, over-diversify (at least relative to the amount of capital that I had), and use complex strategies that can't be mimicked through a 13F snapshot. Also important to note, when an investment manager owns more than 10% of a company, they have to report any trades within 2 days. ex 1. Tried copying Whale Rock Capital Management LLC for a quarter or two, and they were out of every position by the time the next 13F came out, which could have been, at the very worst, 135 days before, and at the very best, 45 days before. If Whale Rock Capital Mgmt LLC got back in those positions the next day—since 13Fs are released after-hours—I wouldn't know for another 90-t+45 days, where t is the days until the end of the quarter. Some funds make moves like that to compete with other funds and obscure information. ex 2. Abdiel recently bought >10% of GDRX at the end of Q3, and sold just enough stock on 17-12-21 and 22-12-21 (Q4) to make themselves—from what I believe—less than 10% owners so now they don't have to report GDRX trades within 2 days, of which, the next time we would hear about it would be 31-12-2021+45 days. This makes sense considering their recent stock price since then. Abdiel's strategy was perfect for me in terms of risk/reward as well as their investing horizon. Although they've been struggling this past year relative to the market, their average quarterly growth rate and annual growth rate—even through the previous set of rate hikes—from 31-12-15 to 30-09-22, was 15.23% and 78.61% respectively. Despite another few thousand dollars in deposits from extra savings in 2020 and 2021 (totaling around $7-8k), they were able to work me up to $32k. Only thing I needed to do was create a spreadsheet based on their allocations, enable SEC alerts for their filings, and rebalance quarterly (which is easy for Abdiel). Definitely not a strategy I would recommend for any money you are not willing to lose, but if you have any extra money, it might be worth some research. TLDR: Find a hedge fund or other vehicle whose strategy matches yours, verify they stay true to this strategy via their 13Fs, and mimic their positions with any spare cash you are willing to lose. [link] [comments] |
| Looking for advice to retire in 6-7 years Posted: 20 Jan 2022 11:15 AM PST I am looking to figure out where to invest money to retire in say 6-7 years. I am 46, my wife is 47. Current employment puts us at about $250k a year in income. I earn just under $190k and my wife is at about $65k, although this is within the last three years (I changed jobs in 2019 that increased my income by about $65-70k). Our mortgage is our only current debt - $384k at I think 3.25% interest. We have a 17 year old senior that is headed to college next year, and we have a 13 year old in 8th grade. Ideally, we would like to retire once our youngest gets to, or is in, college. We have been pretty good about retirement savings, but not very good about non-retirement investment accounts. Given that I'd like to retire in my early to mid 50's, I really need to move forward on these types of investments, and was wondering what people thought on this. Current finances include: Income: $250k Debt: $384k at 3.25% Savings accounts for emergencies: $80k Rollover IRA and Roth accounts: `$240k My work retirement portfolio (457, etc.): $690k, currently invested fairly aggressively Wife's work retirement portfolio: amount unknown at the moment, public school teacher with about 15 years of service in. Maybe $150-200k? Kids college fund: $75k (both kids are 4.0+ gpa though, so we're hoping for scholarships too) Current investments – we both pay social security equivalent into an investment fund (our state as opted out of soc security), my wife pays into a 401k (457 maybe?) that she gets some match on from the school district. I currently contribute the max ($20,500) to deferred comp, and I put an additional 7% of my salary into a pension fund. My pension will vest at 5 years, which will get me 25% of my salary once I turn 60, with an additional 5% per year of service up to 15 years - meaning I could retire with 15 years at 58, and then at 60 begin collecting 75% of my salary. My dilemma is this – we have a $1M+ in retirement accounts already, but we will get taxed for early withdrawal on those if we were to retire around 53. Once we hit retirement age where we don't get hit so hard on taxes, we should be golden with our retirement funds and pension that kicks in at 60. What I need is a plan to get me from 53 to 60. We don't currently have a regular brokerage account. Investment background is not minimal, but I'm not an expert. I own a lot of books on the subject, and I find the stock market fascinating. I have self-managed my rollover IRA and Roth accounts, and did pretty negligible in my returns early on. I had a great 2020 and 2021, as my portfolio return is those accounts is about 36% per year over the last three years, 22% over last five years. Since inception (2005), however, I'm at 12%. I recognize that I don't have a significant amount of time to devote to it, and realize that going forward, 10-40% returns are unlikely (down 2.15% this year at the moment). Looking back, I obviously wish I would have dumped a lot of money into a brokerage account in March 2020, but I didn't. What I would like to do is put a chunk of money in now – say 10-25k, and then contribute monthly (maybe 1000-2000). Given the tax consequences for selling stocks, I am thinking simply going in on index funds – SPY, QQQ, etc. There are so many people here way smarter than I am about investing, and am hoping folks can give me some advice on where to put things or any other ideas for achieving enough to live on once I hit mid-50's. Thank you so much for reading this far if you have. [link] [comments] |
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